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Argentina's Wine Exports Squeezed by Inflation

Higher Labor Costs Make Local Producers Less Competitive; Days of $8.99 Bottles of Malbec Are Over

By

Sara Schaefer Muñoz

Updated Aug. 12, 2014 4:15 p.m. ET

MENDOZA, Argentina—For years, Jose Manuel Ortega exported a type of Malbec wine from his vineyard beneath the snowy Andes that U.S. reviewers called "broodingly inky," with a "monumental flavor."

But he recently halted production of the fruity, garnet-colored Massimo line. Amid Argentina's escalating inflation, labor costs were soaring, and he could no longer make a profit on the lowest-priced bottles selling at retail for $9 to $12. A national economic downturn that is battering everything from auto makers...